The iTablet is probably not a netbook strategy, but a MAC that supporting streaming Video via Verizon's LTE network and attacks the Kindle's ebook functionality.
You may recall that Lowell McAdam, Verizon Wireless CEO. was talking about the ability to stream an HD Video channel on their network.
As for the Kindle functionality, Jobs can undo the Bezos fiasco about audio via iTunes bundling.
Speculating without corraboration, Apple can probably find a way to sync text to audiobooks as well, but that is probably a futuristic function.
The WSJ seems to indicate that Steve, back on the job, is causing a stir amongst his employees and pushing back on the assumptions used on the ITablet.
From Verizon's perspective, allowing Steve to be Steve, masks the frantic buildout they are doing to provide the network for the iTablet. So its a win-win even if it does nothing but freeze the market for a while.
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